Pattern Day Trader Rule

“John, your friendship and wisdom has truly been a blessing to me and my family. I am forever indebted to you.” Jim Wilson

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Your Income Potential – Day Trading Stocks

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Pattern Day Trader Rule

The key day trading rule - is to maintain a minimum

account balance of $25,000.

The day Trading WEALTHlearning program:

Each client day trader moves from paper trading (day trading with a simulator – first trading only 100 shares to learn the software, then 500 shares with emotion, then 1,000 shares with more emotion, all the while doing what’s needed to gain experience daytrading new school) to cash.

For beginners going cash, I recommend a trading account balance of $50,000; trading on the edge of $25,000 is not even close to the comfort zone you need for learning.

Remember, traders first need to learn to lose.That’s why we limit lot size to 100 shares per stock trade.

Then traders learn to win, then consistently win, here with 500 share lot size, then consistently and very profitably win with 1,000 shares a day trade.

As you progress from 100 shares, to 500 shares, then 1,000 shares a day trade, you will want a trading account of $100,000 to have buying power with stocks of all price levels.

Pattern Day Trader Rule – What Google Says

When you “do a Google” (use the Google AdWords keyword research tool), the terms with the most global and monthly clicks pattern day trading and day trader rule are: pattern day trading, day trading rules, daytrading rules, day trader rules, pattern day traders, pattern day trader, pattern day trade, day trade rules.

Below I have excerpted definitions and other day trading rules from three authority websites as they relate to pattern day traders aE” for your additional information.

Notice the terms being searched – day trading rules, daytrading rules, day trader rule, day trader rules, pattern day traders, pattern day trader, pattern day trade, day trade rules – are not the terms you find in the descriptions provided by these information sites.

This may be the disconnect between what we think we know and what we need to know that when bridged with this information allows us to play by the rules of the game of day trading stock.

Pattern Day Trader
“Pattern day trader is a term defined by the U.S. Securities and Exchange Commission to describe a stock market trader who executes 4 (or more) day trades in 5 business days in a margin account, provided the number of day trades are more than six percent of the customer’s total trading activity for that same five-day period.

As the trader is exposed to the danger of day trading and intraday risks and potential rewards, it is subject to specific requirements and restrictions.”

Basic Summary
“A FINRA (NASD) rule that applies to any customer who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period; the rule applies to margin, but not to cash accounts.”
“A pattern day trader is subject to special rules.”

“The main rule is that in order to engage in pattern day trading you must maintain an equity balance of at least $25,000 in a margin account. The required minimum equity must be in the account prior to any daytrading activities.”

Day Trading Margin Requirements: Know the Rules
“We are issuing this investor guidance to provide some basic information about day trading margin requirements and to respond to a number of frequently asked questions that we have received. We also encourage you to read our Notice to Members and Federal Register notice about the rules.”

Summary of the Day-Trading Margin Requirements
“The rules adopt a new term “pattern day trader,” which includes any margin customer that day trades (buys then sells or sells short then buys the same security on the same day) four or more times in five business days, provided the number of day trades are more than six percent of the customer’s total trading activity for that same five-day period.

Under the rules, a pattern day trader must maintain minimum equity of $25,000 on any day that the customer day trades. The required minimum equity must be in the account prior to any day-trading activities.

If the account falls below the $25,000 requirement, the pattern day trader will not be permitted to day trade until the account is restored to the $25,000 minimum equity level.”

Pattern Day Trader
“FINRA rules define a “pattern day trader” as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six percent of the customer’s total trades in the margin account for that same five business day period.

This rule represents a minimum requirement, and some broker-dealers use a slightly broader definition in determining whether a customer qualifies as a “pattern day trader.”

Customers should contact their brokerage firms to determine whether their trading activities will cause them to be designated as pattern day traders.”

“A broker-dealer may also designate a customer as a “pattern day trader” if it “knows or has a reasonable basis to believe” that a customer will engage in pattern day trading. For example, if a customer’s broker-dealer provided day trading training to such customer before opening the account, the broker-dealer could designate that customer as a “pattern day trader.”

“Under FINRA rules, customers who are deemed “pattern day traders” must have at least $25,000 in their accounts and can only trade in margin accounts. For more information on pattern day traders and related FINRA margin rules, please read the SEC staff’s investor bulletin “Margin Rules for Day Trading“.

Then you have, NO Patter Day Trader Rule = just go to the beach,

Laguna Beach

John McLaughlin, StockCoach

Day Trader (Day Trading Stocks) - Consultant / Coach

Call for your Free Consultation ($500 value)

949-218-4114

“Quite simply, John’s day trading systems work! His ability to understand the market and stock price action is uncanny, and his trading wealth learning program is what makes it all come together.”

What Clients Say...

I have implemented many of the ideas, day trading strategies, simple day trading rules you recommended to develop my trading skills and my financial performance has sky rocketed. You are the best.

Bobby Ferduson

John’s “in the now” online day trading perspective, ideas, calls, his intuitive skills, tips, and recommendations on how to remain a daytrade winner, to be highly competitive in today’s stock markets are invaluable, to say the least. Moreover, John delivers his day trading system and message with confidence, integrity and a style that is sure to command the attention and respect of any day trader in search of his dream of success.

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John’s day trader coaching on optimizing your trade executions and improving your win rate is absolutely phenomenal! As a newbie, I learn valuable advice on how to day trade stocks new-school and calm myself so that I stand miles apart from other day traders, even those that are more experienced than me.

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John knows Day Trading! Few traders can match John for creative thinking and having the right day trading system to get the job done. Although I have known John personally, this recommendation is purely based on his skills and ability as a day trader genius.

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I would like to just say that John is one of the most engaging, insightful, knowledgeable and inspiring persons that I have ever met.
He is an exceptional and very talented day trader who has a wealth of knowledge in daytrading and winning.

Selma Tanssy

Until this year, I’d always thought that my efforts were on track… that was until I reached out to John for some trading advice. John showed me just how much the markets and trading, short or long term, have changed and why I needed to change.

Christopher Anthony

I have implemented several of the ideas, day trading strategies, simple day trading rules you recommended to develop my trading skills. My financial performance has sky rocketed.

Bobby Ferduson

John gave me valuable day trading insight on how to be a winning day trader, on building my own day trading business and some great day trading tips on how to be in the present moment bbefore, during, and after each trade, where before I mostly fretted about losing and begging the gods to win.

Darlene Elenor

John traded with me in a chat room scalping stocks intraday. His calls are spot on and he has a knack for finding the stocks that are moving right now. His bus motto, “if it ain’t movn why get on?” can help any novice trader learn to win the day trading game every day, in all market conditions.

Rahul Singhal

Not only is John a great day trader and coach, but he is also a very compassionate professional who cares about my needs and always remembers to put my concerns first. Ever since I met him, John has been a money making breath of fresh air in a sea of day trading trouble.

Alvina Amabel

John’s coaching plugged me directly into what I needed to know and learn about the marketplace and my trading to shift from a do nothing day trader to a champion wealth builder.

Billy Jack

John’s support is candid, simple, yet captivating. I can’t wait to daytrade the next day with John, and celebrate the wins.

Laurensia Jovita

Don’t expect to get rich quick. Do expect to learn fast, stay in tune with the markets and stock day trading opportunities, and be on the big money side of most of his stock trading calls he makes in the day trading room.